Ministries take varied steps to meet government savings demand
Thursday 1st October 2026 on 21:30 in
Iceland
The 11 ministries are responding to the government’s savings requirement in different ways, with some reducing staff positions and others cutting costs through different measures, mbl.is reports. The requirement applies to government institutions and therefore to all ministries.
mbl.is contacted or sent questions to all ministry permanent secretaries about how they planned to meet the requirement and whether staff layoffs were expected.
The Ministry of Justice has eliminated six positions. Two employees were laid off, two were told their contracts would not be renewed, and two vacant positions will not be filled. Permanent Secretary Páll Winkel told mbl.is that no further layoffs are planned, though spending will be restrained across the ministry’s operations.
The Ministry of Health laid off two specialist employees in September as part of the savings measures. In January, the Ministry of Education and Children laid off six staff members after a reorganisation that abolished the permanent secretary’s office. The ministry said the measures met its savings requirement and that no further steps were planned.
The Prime Minister’s Office plans to reduce staffing by two and a half full-time positions next year, alongside other efficiency measures, including better use of digital technology. It does not expect to lay off staff, as not all vacant roles have been filled over the past year. The office expects to have 31 employees on its payroll next year, compared with 45 at the start of 2024. It said the changes would not reduce services to the prime minister, government or public.
The Ministry of Finance and Economic Affairs does not expect to lay off staff. It is finalising plans to reduce staffing by two to three positions in 2027 and is considering a move to more affordable premises.
The finance ministry said its savings would be pursued while maintaining the ministry’s statutory work. The article also reported that the Prime Minister’s Office would reduce staffing without layoffs.